tag:blogger.com,1999:blog-5090403.post1796337934449026897..comments2023-09-07T04:24:11.648-06:00Comments on y-intercept blog: Hubris v. Greedy-intercepthttp://www.blogger.com/profile/03389285761013186443noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5090403.post-71680489186827925102009-03-19T00:24:00.000-06:002009-03-19T00:24:00.000-06:00People can chase profits too far in a regulated ec...People can chase profits too far in a regulated economy. For that matter, the Fed had been actively trying to regulate the economy through the monetary supply. GSEs like FreddieMac regulated the mortgage market via its re-insurance policies.<BR/><BR/>These regulations appear to have actually magnified the scope of the problem.<BR/><BR/>BTW, my post was not a euphemism as the diagnosis that the problem was the result of greed of a few (as you suggest) or widespread hubris (as I believe) leads to dramatically different remedies.<BR/><BR/>If it is the problem of a few bad apples, then we need to find ways to prosecute these few bad apples.<BR/><BR/>If the problem was the hubris of technocrats; then we won't solve the problem by creating an army of technocratic regulators. The technocratic regulators will simply amplify the systemic fault.<BR/><BR/>Maurice J. DupreƩ has an interesting article on the hubris of the idea that we can create a financial system free of risk though mathematical models. The article is a <A HREF="http://www.math.tulane.edu/~dupre/SEEDS.pdf" REL="nofollow">PDF</A>y-intercepthttps://www.blogger.com/profile/03389285761013186443noreply@blogger.comtag:blogger.com,1999:blog-5090403.post-56316690457618551242009-03-18T22:22:00.000-06:002009-03-18T22:22:00.000-06:00The banks are insolvent because they chased a prof...The banks are insolvent because they chased a profit too far.<BR/><BR/>Now we have to bail them out.<BR/><BR/>Cut it up and redefine it with euphemisms all you want, it's still irresponsible behavior of a few in an unregulated market now milking the many who did nothing more than pay their taxes.<BR/><BR/>In short... who cares if it's hubris or greed, the market didn't self regulate in time, which is a fine enough argument for even my limited government frame of mind to justify a heavy dose of regulation to make sure it doesn't happen again.Anonymousnoreply@blogger.com